A No - Load Fund
MUHLENKAMP FUND
PO Box 598, Wexford PA 15090-0598 * (412)935-5520 or
(800)860-3863
e-mail:[email protected]
Semi - Annual Report
June 30, 1995
Dear Shareholder:
The Trustees and Management of the Muhlenkamp Fund are
pleased to present this semi - annual report of your fund.
As of June, 30, 1995, the Net Asset Value (NAV) of your fund
was $18.95, up 16.76% year to date. For the same period the
S&P 500 was up 18.59%.
Year Ending Total Return (%)
12/31 Muhlenkamp Fund S&P 500
1991 45.4 30.5
1992 15.8 7.7
1993 18.1 9.9
1994 (7.3) 1.3
6/30/95 16.8 18.6
Chart goes here. This is a line chart comparing the
performance of the Muhlenkamp Fund with the S&P 500 since
December 31, 1990. On December 31, 1990 the Fund and the
S&P are each assigned an index value of 100. At the end of
each subsequent year (and six month period ending June 30,
1995) this value is recalculated using the performance
figures from the above table. The results shown below are
then plotted on a line chart.
X-Axis = Date Y-Axis = Index Value
Muhlenkamp Fund S&P 500
12/31/90 100 100
12/31/91 145 131
12/31/92 168 141
12/31/93 198 155
12/31/94 184 157
6/30/95 215 186
Six months ago, in Muhlenkamp Memorandum #33, we wrote, "We
are looking at a 20% off sale." Since year-end, bond prices
have moved up 16% and stock prices have moved up over 20%.
Prices are now back to fair values. The sale is over. Long-
term Treasury interest rates have historically equaled
inflation plus 2.5 - 3.0%. Inflation is currently about 3%.
At current interest rates of 6.6%, the bond market is now
close to fair value. Stock prices and P/E's are back to
levels which imply returns of 8-9%, which also match the
historic returns of 5-6% over inflation. So we judge
current stock prices to be fair. Since we prefer stock
returns of 8-9% to bond returns of 6.6%, we currently prefer
stocks to bonds. But with last winter's sale now over, both
markets are likely to be more volatile.
Going forward, we expect it to be a stock pickers market and
we are spending our time picking stocks. We also find it
interesting that, for at least the past 25 years, one of the
best signals to buy stocks has been to do so when the Fed
lowered short-term interest rates. (That's why Marty Zweig
says, "Don't fight the Fed!") The Fed lowered interest
rates in the first week of July. For many market timers,
this should have signaled the beginning of a bull market.
Meanwhile, other background factors continue to improve.
Domestically, the odds of the Fed achieving a "soft landing"
are looking better all the time. The US will not solve its
deficit problems until it comes to grips with Social
Security but a reduction in government spending is an
improvement; and despite their differing agendas, the
President and the Congress seem to be driving toward a
reduction in government spending. Internationally, Bosnia
remains a mess, but it is a known mess. Russia could still
implode but each month or quarter that goes by allows her
former satellites to progress toward free economies and
democratic governments. Mexico seems to be improving after
serving as a warning to other emerging countries that
relying on international money flows is a risky business.
We do have two major concerns. One is Japan, where the
economic situation is not unlike the US in the early `30's.
(See A. Gary Shillings column in Forbes magazine dated
8/14/95.) There is still potential for Japan to trigger a
worldwide depression (which makes this a particularly
foolish time to bash Japan on trade). Should this happen,
there would be few safe harbors for our investments. We
view the odds of Japan imploding as fairly low, but the
consequences are dire enough that it must be monitored. The
recent actions of Japan's Central Bank are an encouraging
sign.
Our second "concern" is that the undervalued dollar will
continue to appreciate, driving down the dollar value of
foreign investment. Fortunately, we can avoid this risk by
avoiding foreign investments.
We appreciate your continued interest in the Muhlenkamp
Fund. We welcome your questions and comments, and we ask
that you spread the word of our Fund among your friends.
Ronald H. Muhlenkamp
President
August 1995
Investment Custodian Auditors
Advisor
Muhlenkamp & Co., PNC Bank Schneider, Downs &
Inc. Co., Inc., CPAs
12300 Perry Pittsburgh PA 1133 Penn Avenue
Highway 15265
Wexford, PA 15090 (412)762-3798 Pittsburgh, PA 15222
(412)935-5520 (412)261-3644
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1995
(UNAUDITED)
ASSETS
INVESTMENTS, AT VALUE (Identified Cost $19,977,172
$17,253,630)
RECEIVABLES
Securities Sold $380,647
Dividends $23,482
Interest $6,208
Overpayment of Advisor Fees (Note 3) $4,940
415,277
Total Assets $20,392
,449
LIABILITIES
ACCOUNTS PAYABLE
Advisor Fee Payable $1,108
Securities Bought $56,140
Total Liabilities $57,248
Total Net Assets $20,335
,201
NET ASSETS
CAPITAL PAID IN ON SHARES OF BENEFICIAL INTEREST $17,124,099
(Shares Authorized - unlimited) (Note 4)
ACCUMULATED UNDISTRIBUTED NET INVESTMENT INCOME 119,797
ACCUMULATED UNDISTRIBUTED GAIN ON INVESTMENTS 75,976
NET UNREALIZED APPRECIATION OF INVESTMENTS AS OF 3,015,329
JUNE 30, 1995
Total Net Assets $20,335,201
NUMBER OF SHARES OF BENEFICIAL INTEREST 1,072,547.750
OUTSTANDING (Note 4)
NET ASSET VALUE PER SHARE (Net assets divided by $18.95
shares outstanding)
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995
Muhlenkamp
Fund
Principal Value
Amount
or Shares
COMMON STOCK - 92.7%
Aerospace - 5.1%
* BE Aerospace, Inc. 17,000 $150,875
Lockheed Martin 14,000 883,750
Airlines - 2.5%
Air Express International Corp. 21,562 506,707
Autos - 5.3%
Ford Motor Company 22,000 654,500
Superior Industries 13,180 411,875
Building - 1.8%
Armstrong World 3,000 150,375
* Griffon Corp. 18,400 147,200
* Strober Organization 16,000 68,000
Banks - 8.5%
Chemical Bank 12,000 567,000
Citicorp 10,000 578,750
Integra Financial 8,426 409,714
J.P. Morgan 2,000 140,250
Brokerage - 5.3%
A. G. Edwards 12,500 281,250
Merrill Lynch 4,000 210,000
Morgan Stanley, Inc. 2,000 164,000
Salomon, Inc. 10,000 401,250
Capital Goods - 6.4%
Commercial Intertech 10,000 160,000
General Electric 9,000 507,375
Graco Inc. 1,700 45,687
* Idex Corp. 7,500 251,250
Kysor Industrial 15,000 311,250
Conglomerate - 2.8%
GATX Corp. 6,000 282,750
Scotsman Industries, Inc. 15,000 277,500
Chemicals - 4.2%
Borden Chemical 10,000 182,500
Eastman Chemical 8,000 476,000
* Methanex Corp. 20,000 167,500
Consumer Durables - .3%
* Nycor, Inc. 25,000 65,625
Electronics - 2.5%
Intel Corp. 8,000 506,500
Finance - 6.3%
Fidelity National Financial 20,918 317,355
Green Tree Acceptance Corp. 21,400 949,625
Closed End Investment Funds - 1.1%
* Gemini II Capital Shares 8,500 182,750
Trust for U.S. Treasury 32,789 32,789
Obligations
Furniture - 2.3%
Stanley Furniture, Inc. 25,000 190,625
* Winsloew Furniture 54,600 266,175
Sub-Total $10,898,752
* Non - Income Producing
See Notes to Financial Statements
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995
(Continued)
Muhlenkamp Fund
Principal Value
Amount
or Shares
BALANCE BROUGHT FORWARD $10,898,752
Insurance - 16.8%
American Bankers Insurance Group 8,000 254,000
Bankers Life Holding 20,000 380,000
Conseco, Inc. 12,000 544,500
Frontier Insurance 16,751 450,183
Integon Corp. 15,000 255,000
Penn Treaty American Corp. 5,000 63,750
Providian Corp. 3,600 130,500
Sun America 15,000 765,000
Vesta 15,000 515,625
Med Services - 2.1%
* Medrad, Inc. 8,000 135,000
U.S. Healthcare 9,000 275,625
Metals - 4.0%
Cyprus Minerals 9,000 256,500
Matthews International Corp. 8,000 150,000
Rouge Steel 17,000 395,250
Paper - 2.6%
Champion International 10,000 521,250
Rails - 1.0%
Burlington Northern Industries, 3,000 190,125
Inc.
Savings and Loan - 2.9%
Federal National Mortgage Assoc. 6,100 576,450
Technology - .5%
* PLC Systems 10,000 98,125
Tobacco - 4.8%
Philip Morris 12,860 956,462
Trucks - 2.8%
Cummins Engine Co. 13,000 567,125
Transportation - .7%
Sea Containers CL A 8,000 134,000
Total Common Stocks (Cost $18,513,222
$15,891,227)
BONDS & NOTES - 5.9%
General Motors Acceptance 2,300,000 515,200
Corporation -0%, deferred
debentures, due 2015
Treasury Bonds - 7.25% due 2016 400,000 424,500
U.S. Treasury, stripped interest 800,000 241,750
- - 0%, due 2013
Total Bonds and Notes (Cost $1,181,450
$1,085,550)
PREFERRED STOCK - 1.4%
Pioneer Financial - exchangeable 10,000 282,500
Total Preferred Stock (Cost 282,500
$276,853)
Total (Cost $17,253,630) $19,977,172
* Non - Income Producing
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
INVESTMENT INCOME
Interest $43,614
Dividends 193,856
Total Investment Income 237,470
EXPENSES
Investment advisor (Note 3) $87,147
Administrative 5,632
Registrations and filing 15,286
Custodian 8,954
Printing and Postage Expenses 7,967
Auditor's Fees 11,000
Total Expenses 135,986
Commission Credits (Note 6) (11,000)
Net Expenses 124,986
Net Investment Income 112,484
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments 75,976
Change in unrealized appreciation
in value of investments for the period 2,689,110
Net Gain on Investments 2,765,086
Net Increase in Net Assets $2,877,570
Resulting from Operations
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
STATEMENT OF CHANGES IN NET ASSETS
FOR YEAR ENDED DECEMBER 31, 1994
AND SIX MONTH PERIOD ENDED JUNE 30, 1995 (UNAUDITED)
Six
month
period
ended
June 1994
30,
1995
(Unaudi
ted)
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net Investment Income $112,484 $103,261
Net realized gain on investments 75,976 392,326
Unrealized (depreciation) 2,689,110 (1,702,528)
appreciation in value of investments
Net Increase (Decrease) in Net
Assets Resulting From $2,877,570 (1,206,941)
Operations
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income - (94,651)
Net realized gain from investments - (252,117)
- (346,768)
CAPITAL SHARE TRANSACTIONS
Net proceeds from sale of
135,559.035 shares in 1995 and 2,340,068 7,258,915
414,315 shares in 1994 (Note 4)
Net asset value of 0 shares in 1995
and 21,392 shares in 1994 issued to - 346,768
shareholders on reinvestment of dividends
(Note 5)
Cost of 86,389.268 shares in 1995
and 87,761 shares in 1994 redeemed (1,493,187) (1,498,829)
(Note 4)
Net Increase in Net Assets
Resulting from Capital 846,881 6,106,854
Share Transactions
Total Increase in Net Assets 3,724,451 4,553,145
NET ASSETS
Beginning of year 16,610,750 12,057,605
End of period (including
undistributed investment gain of
$75,976 and accumulated undistributed net
investment income of $119,797 in $20,335,201 $16,610,750
1995, and undistributed net investment
income of $7,313 in 1994)
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
SELECTED PER SHARE DATA AND RATIOS
FOR THE YEARS ENDED DECEMBER 31,1990 THROUGH 1994
AND SIX MONTH PERIOD ENDED JUNE 30, 1995 (UNAUDITED)
Six
month
period
ended
June 1994 1993 1992 1991 1990
30,
1995
(Unaudi
ted)
NET ASSET VALUE, BEGINNING $16.23 $17.86 $15.20 $13.25 $9.21 $11.04
OF PERIOD
Income from Investment
Operations
Net Investment Income .10 0.11 0.12 0.20 0.13 0.19
(1)
Net gains or (losses) 2.62 (1.39) 2.63 1.89 4.05 (1.83)
on securities
Total from 2.72 (1.28) 2.75 2.09 4.18 (1.64)
Investment
Operations
Less Distributions:
Dividends (from - (0.10) (0.08) (0.14) (0.11) (0.19)
investment income)
Distributions (from - (0.25) - - - -
capital gains)
Return of capital - - (0.01) - (0.03) -
Total - (0.35) (0.09) (0.14) (0.14) (0.19)
Distributions
NET ASSET VALUE, END OF $18.95 $16.23 $17.86 $15.20 $13.25 $9.21
PERIOD
Total Return 16.76% (7.20)% 18.10% 15.80% 45.40% (14.80
)%
Net Assets, End of Period $20,335 $16,610 $12,057 $4,716 $1,926 $1,183
,201 ,750 ,605 ,214 ,529 ,190
Ratio of Total Expenses to 1.49% 1.57% 1.30% 1.41% 1.71% 1.76%
Average Net Assets (3)
Ratio of Net Income to 1.23% 0.70% 0.70% 1.44% 1.17% 1.95%
Average Net Assets
Portfolio Turnover Rate 10.00% 25.60% 14.10% 20.10% 52.50% 47.47%
Average Commission Rate .0407 .0471 .0586 .0704 .1304 .0163
Paid (dollar per share)
(1) Computed on weighted average number of shares
outstanding during the year.
(2) During the years ended December 31, 1992 through 1994,
and the 6 month period ending June 30, 1995, the Fund
utilized commission credits of $4,420, $5,590, $8830, and
$11,000, respectively, to pay certain expenses of the Fund.
The total returns for the Fund would have been 15.6%, 18.0%
, (7.2)% and 16.67% for the years ended December 31, 1992
through 1994, and the 6 month period ending June 30, 1995,
respectively, without the credits.
(3) Beginning with the period ended June, 30, 1995, the
ratio of Total Expenses to Average Net Assets was computed
using the Total Expenses for the Fund before Commission
Credits.
See notes to financial statements.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 1 - ORGANIZATION
The Wexford Trust (the Trust) was organized as a
Massachusetts Business Trust on September 21, 1987 and
operations commenced on November 1, 1988. The Trust is
registered under the Investment Company Act of 1940, as
amended, as a diversified open-end mutual fund. The
Muhlenkamp Fund (the Fund) is a series of the Wexford Trust
and is currently the only fund in the Trust.
The Fund is exposed to credit risk on the amount invested in
marketable securities. The maximum amount of loss the Fund
would incur is limited to the amount recorded in the 1994
financial statements. The Fund does not hold any type of
collateral on the marketable securities. This exposure to
credit risk is customary for all entities which have
invested in financial instruments.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies applied by
management in the preparation of the accompanying financial
statements follows.
Investment valuations - Each stock and bond is valued at the
latest sales price thereof on the last business day of the
fiscal period as reported by the securities exchange on
which the issued is traded. If no sale is reported, the
security is valued at the last quoted bid price.
Investment transactions and related investment income -
Investment transactions are accounted for on the trade date
(date the order to buy or sell is executed). Dividend
income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis. The Fund uses the
specific identification method in computing gain or loss on
the sale of investment securities.
Federal income taxes - It is the Fund's policy to comply
with the requirements of the Internal Revenue Code that are
applicable to regulated investment companies and to
distribute substantially all of its taxable income to its
shareholders. Therefore, no federal income tax provision is
required.
Dividends and distributions to shareholders of beneficial
interest - Dividends and distributions are recorded by the
Trust on the record date.
NOTE 3 - INVESTMENT MANAGEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES
Muhlenkamp and Co., Inc., an affiliate of which an officer-
stockholder is a trustee of the Trust, receives a fee for
investment management. The fee is computed and accrued
daily based on the net asset value at the close of business
and is equal to 1% per annum. The fee totaled $87,147 for
the period ended June 30, 1995. The investment advisory
agreement provides for the reimbursement of expenses
excluding auditor fees, fidelity bonding, and brokerage
commissions until the net assets of the Muhlenkamp Fund (the
Fund) equal or exceed $1,000,000. Since the Fund's net
assets exceed this amount, the advisor is permitted to
charge the fund for some or all of its routine
administration costs which totaled approximately $37,839 for
the period ended June 30, 1995. An expense reimbursement of
$37,839 was requested by the advisor and paid by the fund
for the period ended June 30, 1995.
Certain trustees are also officers of the investment
advisor. Certain affiliated persons held in the aggregate
61,944.854 shares with a net asset value of $1,173,854.98 in
the Muhlenkamp Fund at June 30,1995.
In addition, the Muhlenkamp & Co., Inc. Pension & Trust Fund
held 10,981 shares with a net asset value of $208,098 at
June 30, 1995.
As of June 30, 1995 the Fund has overpaid Investment Advisor
Fees of $4,940. This overpayment results from the Fund's
policy not to charge duplicate management fees on
investments in other registered investment companies.
THE WEXFORD TRUST
(COMPRISED OF THE MUHLENKAMP FUND)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 4 - CAPITAL SHARE TRANSACTIONS
The Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of beneficial
interest with a par value of $.001 per share. Transactions
in capital stock were as follows:
Shares
June 1994
30,1995
Shares outstanding, beginning of 1,023,37 675,34
period 8 2
Shares sold 135,559 414,31
5
Shares issued to shareholders in - 21,392
reinvestment of dividend
Shares redeemed (86,389) (87,671)
Shares outstanding, end of period 1,072,54 1,023,
8 378
NOTE 5 - DIVIDENDS AND DISTRIBUTIONS
On June 30, 1995, no distributions were declared by the
Trustees.
NOTE 6 - DIRECTED BUSINESS ARRANGEMENT
The Fund has a directed business arrangement with Capital
Institution Services, Inc. (CIS). Upon the purchase and/or
sale of investment securities, the Fund pays a brokerage
commission to CIS. These commission payments generate
nonrefundable cumulative credits which are available to pay
certain expenses of the Fund.
The following is an analysis of commission credits
generated, utilized and available to pay future expenses of
the Fund:
Amount
Balance, January 1, 1995 $2,474
Commission Credits 3,302
generated during 1995
Commission Credits (11,000)
utilized
Balance, June 30, 1995 (5,224)
The Fund utilized commission credits of $11,000 to pay
auditor fees.
The following is an analysis of Fund expenses with and
without Commission Credits.
With Without
Commiss Commiss
ion ion
Credits
Credits
Semi-Annual Fund Operating Expenses (as a
percentage of average net assets)
Investment Advisor .96% .96%
Administrative .06 .06
Registration and Filing .17 .17
Custodian .10 .10
Printing and Postage .09 .09
Auditor - .12
Total Fund Expenses 1.38% 1.5%
